Summary for Research Report 4

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The vital role played by indigenous crops in sustaining the livelihoods of the rural poor has already been thoroughly discussed in an earlier document (Barry, 2007).

The aim of this study was:

- to develop a general level of understanding concerning the functioning of the market for two underutilised crops: beli (Aegle marmelos) and wood-apple (Feronia limonia), and,

- identify a set of interventions which can be made to improve the economic position of the crop growers and collectors.

The study raised the following major issues and recommendations for the Sri Lankan beli and wood-apple subsectors.

There is a genuine lack of coordination along the supply chain with the absence of any superior varieties being a leading cause. No farms were identified and production was thus highly scattered across the island, yet, leading agro-processors signalled that demand for processed beli/wood-apple products was good. The latter group also signalled that it was either unable or unwilling to develop any long term market development strategy for these products, since it faced unreliable, limited supplies. On the other hand, growers indicated to be either unwilling or unable to expand production due to a lack of adequate planting material and good, high bearing varieties. To solve this failure along the chain, the study recommends continued support to the current wood-apple research program. Thus, via the Sri Lanka Crop Zoning Project, high bearing varieties should be bred and promoted in the near-by future. In parallel, extension distribution channels should be employed in order to ensure that planting material, as well as information, reaches the small-scale rural sector (who may or may not fall under the CPZ). The beli program is still in a preliminary phase, and is encouraged to duplicate similar steps taken as for wood-apple (e.g. diversity assessments, ethnobotanical surveys, farm trials, chemical analyses etc.).

There seems to be a gradual movement away from beli/wood-apple towards more profitable fruits such as mango, coconut and papaya. It is often the farmer’s perception that beli/wood-apple trees cannot be intercropped with other trees. Furthermore, the economic value of such trees is also inferior to the exotic species. Agronomic farm trials on tree intercropping, in combination with an effective information dissemination/extension system, can help to solve this issue. Importantly, it must be ensured that the information reaches the small-scale rural sector, as the growers- may be more prone to income shocks (as the income level of this group may already be low) and therefore, likely to cut down their beli/wood-apple trees.

Many beli trees also are cut down for their timber, which is said to fetch a better price on the market for ayurvedic medicine than its fruits, and allows for greater, short term, financial gains. Beli trees take a long time to reach their bearing stage (6-7 years, and 15 to full production), but due to low economic returns, are often cut down. This greatly accelerates the process of genetic erosion. The wood is then used for making herbal drinks and powders for Sri Lanka’s flourishing ayurvedic industry.

Some growers’ remoteness in rural areas renders an effective coverage by extension services difficult. Not only will this likely contribute to a state of poor tree management, but it may also serve to reinforce the perception amongst growers that beli/wood-apple are uneconomic and that they should emulate those that grow only high value cash crops.

Due to the geographic spread of the crop, transport costs faced by intermediaries are very high and direct market access to urban and peri-urban markets by growers is limited. Some beli and wood-apple fruits can pass through four to five levels of intermediaries before reaching the final consumer. The emergence of commercial farms closer to the markets as well as the improvement in transport can help solve this issue. There is however, a flourishing SME fruit processing sector of which many processors are using both fruits. Such SMEs are also more likely to operate in fringe, peri-urban areas (unlike the larger processors who can only be found in the major cities). Also, due to their small-size and flexibility, SMEs may be more willing to enter into direct-purchasing agreements with small-scale growers, instead of passing through intermediaries. Supporting SME start-ups in a peri-urban setting would have the benefit of reducing search and transaction costs, enhancing competition, as well as creating value in the form of new products.

Export of beli/wood-apple to date has been limited to ethnic markets and only in relatively small quantities. There is currently no export strategy in place for developing new markets and/or market segments. Although wood-apple products, especially drinks and jams, are very popular domestically, export quantities are believed to be small. The study recommends an initial focus on the domestic market but that preliminary steps can be taken to investigate the potential for exporting new high value products to new markets (e.g. therapeutic products in the case of beli and food products made from wood-apple).

The presence of various legal, financial as well as social barriers are preventing many growers and small scale intermediaries from accessing the major distribution centres in Dambulla, Colombo and Kandy.

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